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12 January, 19:47

The Compagnie Naturelle sells mounted butterflies, using butterfly bait it buys from another firm for $20,000. It pays its workers $35,000, pays $1,000 in taxes, and has profits of $3,000.

What is its value added?

a.$3,000

b.$59,000

c.$19,000

d.$39,000

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Answers (1)
  1. 12 January, 22:43
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    d.$39,000

    Explanation:

    Data provided as per the question is given below

    Pay to workers = $35,000

    Pay in taxes = $1,000

    Profits = $3,000

    The calculation of value added is shown below:-

    Value added = Pay to workers + Pay in taxes + Profits

    = $35,000 + $1,000 + $3,000

    = $39,000

    Therefore we are not considering $20,000 because it spent on intermediate goods.
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